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Duane Reade Reveals Fresh Food Strategy

So far, Duane Reade in New York appears to be the most developed of the drug chains in fresh/prepared foods. Recently, the retailer offered Progressive Grocer’s sister publication, Convenience Store News, an exclusive peek into its fresh food strategy.

May 19, 2010, 08:00 pm
By Renee M. Covino, Convenience Store News

So far, Duane Reade in New York appears to be the most developed of the drug chains in fresh/prepared foods. Recently, the retailer offered Progressive Grocer’s sister publication, Convenience Store News, an exclusive peek into its fresh food strategy.

Q: We read about your Chelsea store debut in March with greatly expanded fresh food — what was the thinking behind it, and why do you think the concept will be a hit in a drug store?

Duane Reade (DR): Our goal for our fresh food program is to make it easy for New Yorkers to access tasty, quality fresh food such as bagged salads and select produce in a convenient and enjoyable way. We know that New Yorkers, like most urbanites, are often rushed and don’t have time for, or access to, a good, fresh meal. Because we have more than 250 convenient locations throughout the New York metro area, chances are we have locations where most New Yorkers live or work. And since many visit Duane Reade frequently, we are making it easy for them to get some fresh food as part of their daily routine and get everything they need for their day, under one roof.

Q: How is the store doing with the fresh food? Which areas seem to be most popular?

DR: Customer feedback to our select fresh food program has been superb. We’re not surprised at the positive reaction, though, because we based our program on direct customer feedback from the start. Our sandwiches and yogurt parfaits have been among the most popular of our fresh food items, as we have found many New Yorkers have adopted them as a quick, quality meal on the go. Other areas of recent expansion include baked goods, produce and easily microwavable, single-serve entrees.

Q: Are there any expansion plans for this format? When will you make the decision to roll it out to other stores?

DR: As with many aspects of our recent business transformation, we test new concepts in certain stores so that we can make adjustments and determinations before deciding on chain rollout. So far, the program has been very successful in the select locations that have been chosen, and we will consider expanding it to other Duane Reade stores, based upon market need and demographics in the specific New York neighborhoods that we serve. Generally speaking, we see an opportunity for drug stores in the United States to expand their fresh food offerings, but, of course, the success of any such program ultimately depends on customer demand in certain markets, as well as ability of the retailers to successfully implement [it].

Q: What are the greatest challenges so far in rolling this out?

DR: In transforming the look and feel of our stores to reflect our new branding, we also successfully configured or reconfigured some of our locations to accommodate the fresh food offering and related refrigeration and display needs. In addition, we worked closely with our suppliers to ensure fresh daily delivery of our product so that we can offer our customers the highest quality possible.

Q: Is Walgreens taking its fresh food cue from you? Do you expect this concept to transfer to Walgreens moving forward?

DR: As Walgreens mentioned in its own corporate communications, they view our fresh food program as one of our areas of strength and are excited to learn about this concept, as well as several of our other urban retailing concepts that have been successful in New York.

Q: What is it about fresh food that makes it the focus of so many retailers today? Why do you think it works well in a chain such as Duane Reade?

DR: Given the many retail options that consumers have today, they realize they can afford to demand more — and as a result are voicing their increased interest in fresh food alternatives. The concept is working well in Duane Reade largely because we listen to New Yorkers and try to give them what they want and need.

Q: What are some of the top fresh food offerings today?

DR: We’ve definitely seen a growing demand for organic and gluten-free products, and as such have begun to offer them to New Yorkers. Among our hottest new items are gluten-free ginger snaps under the DR Delish private brand name, as well as DR Delish organic vitamin C lollipops, DR Delish organic maple leafe crème cookies and DR Delish apple juice. We launched these products in April of this year as part of our expanded green, eco-friendly and health-conscious offering, at the request of New Yorkers who were seeking more options in this space.

For more on the drug store channel and its plans in the fresh food category, see Convenience Store News’ June 14 issue.

SOURCE: Convenience Store News

By Renee M. Covino, Convenience Store News

About Renee M. CovinoConvenience Store NewsContributing Editor Renée M. Covino is a veteran researcher, editor and writer with more than 30 years of experience in the mass retail sector. Her articles and columns have appeared online and in print for dozens of industry trade magazines, newsletters, metro newspapers, Fortune 500 company reports and college textbooks. Covino is a self-named “store connoisseur” who not only writes about retail, but happily supports it.